Shares of mobile payment firm Square (SQ) are advancing after being upgraded by Deutsche Bank on Friday morning.

WHAT'S NEW: Square is "underappreciated" by the Street as the company is well positioned to capitalize on many positive trends, including the growth in micro and small business, electronic payments and the move towards integrated solutions, contended Deutsche Bank analyst Bryan Keane in a note to investors. The analyst and his firm, which upgraded shares to Buy from Hold, and set a $17 price target, added that the mobile payment operator has the ability for efficiency gain and retention of clients more so than industry peers, as it owns its own platform. Keane feels Square is at an inflection point, with growth outpacing peers and nearing profitability.

SOLID EARNINGS REPORT: In early November, the company raised both its yearly and current quarter revenue guidance as well as posting a smaller per share loss than expected for its third quarter and higher than anticipated revenue. At the time of its earnings report, Square said that its "key profitability metrics" continue to improve year-over-year, while its gross payment volume from larger sellers surged 55% last quarter versus the same period a year earlier. The solid quarterly performance was soon followed by an upgrade from Credit Suisse, which noted that the firm's Q3 results were "solid," and showed that the company's revenue growth trends and leverage had improved. Moreover, Square should benefit from its exposure to payments electronification and payments simplification, while it is ahead of the competition in the small business payments space, the firm added.

BANK CHARTERS FOR FINTECH: According to a Wall Street Journal report out earlier today, Thomas Curry, the head of the Office of the Comptroller of the Currency or OCC, said in remarks this morning at Georgetown University Law Center, that the regulator will soon allow fintech firms, to become "special purpose national banks. Fintech firms include entities which offer loans through online platforms and payment systems through smartphone apps and websites, the report noted. The move to allow these companies to be chartered is something the tech industry has been lobbying for and will allow the quickly growing industry "a new opportunity to expand while increasing government oversight of the sector," the Journal added.

PRICE ACTION: Shares of Square are up 2.2% to $12.99 per share in afternoon trading.

OTHER FINTECHS: Other companies in the space include On Deck Capital (ONDK), PayPal Holdings (PYPL), LendingClub (LC), and LendingTree (TREE).